NAA Calls for Rejection of the Proposed ‘Sweetheart Deal’ the USPS Offered Valassis

ARLINGTON, VA—May 23, 2012—The Newspaper Association of America called for the U.S. Postal Regulatory Commission to reject a proposed negotiated services agreement (NSA) between the U.S. Postal Service and direct-mail giant Valassis, saying this special rate proposal will cause significant financial harm to newspapers throughout the country, and will not improve the financial condition of the nation’s postal system.

“Since the days of Ben Franklin—the first U.S. postmaster general as well as a newspaper publisher—there have been strong ties between the U.S. Postal Service and America’s newspapers,” pointed out Caroline H. Little, NAA president and CEO. “But newspaper publishers are shocked by the specifics of this special deal for the country’s largest direct-mail company. The proposal to provide steep discounts to a major newspaper competitor is a dagger aimed at the financial health of newspapers.”

“While we applaud the Postal Service’s efforts to address its ongoing funding challenges through operational and financial reforms, such an attack on a major source of newspaper revenues threatens critical resources that our newspaper members invest back into their communities through their production of quality news and information,” Little added.

NAA’s filing detailed how the proposed Valassis NSA violates the statutory and regulatory requirements under the Postal Accountability and Enhancement Act. It specifically listed several points, including that the NSA:

Would cause unreasonable harm to the marketplace by granting Valassis unprecedented rebates and other terms that would enable and subsidize a direct attack on local newspaper advertising throughout the nation;

Would result in a net financial loss to the Postal Service by driving substantial volumes of newspaper mailings out of the mail system to lower-cost delivery services;

Is tailored so narrowly as effectively to be unavailable to any mailer other than Valassis; and

Would confer an unreasonable rate discrimination in favor of Valassis—granting this one national mailer rebates as high as 36 percent, and a rate advantage up to 72 percent lower compared with rates paid by other mailers in the system, such as local newspaper companies.

View NAA’s full comments to the PRC.About NAANAA is a nonprofit organization representing nearly 2,000 newspapers and their multi-platform businesses in the United States and Canada. NAA members include daily newspapers, as well as nondailies, other print publications and online products. Headquartered near Washington, DC, in Arlington, VA, the association focuses on the major issues that affect today’s newspaper industry: public policy/legal matters, advertising revenue growth and audience development across the medium’s broad portfolio of products and digital platforms.